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Tag: Mexico’s low wages

Mexico is attracting record levels of foreign investment, boasts a stable economy, and is becoming an export powerhouse in areas like cars and aerospace. But when it comes to one economic measure—its minimum wage—the country lags behind only Haiti in the hemisphere.

Pressure is rising on the federal government to change that.

On Thursday, Mexico City’s leftist Mayor Miguel Ángel Mancera proposed to lift the federal minimum wage to 82.86 pesos a day ($6.33) for 2015, a 23% increase from the current 67 pesos ($5.12) in Mexico City and enough to buy a basic basket of foods.

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Mexico is attracting record levels of foreign investment, boasts a stable economy and is becoming an export powerhouse in areas like cars and aerospace. But when it comes to one economic measure—its minimum wage—the country lags behind only Haiti in the hemisphere.

That may soon change. On Thursday, Mexico City’s leftist Mayor Miguel Ángel Mancera submitted a bill to Congress seeking to lift the federal minimum wage to 82.86 pesos a day ($6) for 2015, a 23% increase from the current 67 pesos in Mexico City and enough to buy a basic basket of foods.

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BASILIO GONZÁLEZ is an unusually well-paid Mexican public servant. The 70-year-old’s total pay this year will be 2.8m pesos ($213,000). That is ironic, considering that for 23 years he has been president of the National Minimum Salary Commission. During that time the minimum wage has dropped by 43% after accounting for inflation, according to the Economic Commission for Latin America and the Caribbean (ECLAC), a part of the United Nations. It varies by region but currently averages 66 pesos a day. At that rate, a recipient would have to work every day for 116 years to earn what Mr González will make this year.

Does Mr González deserve his generous haul? Judging by the length of his tenure, Mexican authorities appear to think so. Even before he took office, wage suppression had been an essential part of Mexico’s successful anti-inflation drive. Since 1991, annual inflation has fallen from more than 22% to less than 4%.

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National attention in Mexico has focused on the country’s shockingly low minimum wage after the Mexico City government suggested it could act to increase the local minimum.

The debate has highlighted widespread dissatisfaction with the minimum wage of 67.29 pesos per day, or about $5. But suggestions that it be raised have drawn howls of protest from business chambers, who say raising it would only spur inflation.

The cheap labor that is helping Mexico surpass China as a low-cost supplier of manufacturing goods to the U.S. and lured companies including Nissan Motor Co. has restrained progress for many of the country’s 112 million citizens.

Julio Don Juan makes $400 a month at a noisy, cramped Mexico City call center. Without a raise in three years, he says he had to pull his 7-year-old son out of a special-needs school he can no longer afford.